Viasystems Announces Second Quarter 2012 Results

Adjusted EPS has certain material limitations, primarily due to the exclusion of certain amounts from earnings that are material to the company’s consolidated results of operations, such as costs associated with acquisitions and equity registrations, restructuring and impairment charges, certain interest and other expenses, and certain adjustments to net income to arrive at net income available to common stockholders. As a result, Adjusted EPS differs materially from the earnings per share calculations reported by other companies in the industry, limiting its usefulness as a comparative measure.

Investor Conference Call

Viasystems will broadcast live via internet an investor conference call at 11:00 a.m. Eastern Time today, August 8, 2012. The live listen-only audio of the conference call will be available at http://investor.viasystems.com. The live conference call will be available by telephone for professional investors and analysts by dialing 877-640-9867 (toll-free) or 914-495-8546.

A telephonic replay of the conference call will be available for one week at 855-859-2056 or 404-537-3406. Replay listeners should enter the conference ID 14038874. The webcast replay will be available at http://investor.viasystems.com for an indefinite period.

Forward Looking Statements

Certain statements in this communication constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Viasystems regarding future events and are subject to significant risks and uncertainty. Statements regarding our expected performance in the future are forward-looking statements. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Viasystems undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Actual results may differ materially from those expressed or implied. Such differences may result from a variety of factors, including but not limited to: legal or regulatory proceedings; the ability of Viasystems to successfully integrate DDi’s operations, product lines and technology and to realize additional opportunities for growth; any actions taken by the company, including but not limited to, restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions); or developments beyond the company’s control, including but not limited to, changes in domestic or global economic conditions, competitive conditions and consumer preferences, adverse weather conditions or natural disasters, health concerns, international, political or military developments and technological developments. Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth under the heading “Item 1A. Risk Factors,” in the Annual Report on Form 10-K filed by Viasystems with the SEC on February 15, 2012, Item 1A. Risk Factors,” in the Quarterly Report on Form 10-Q filed by Viasystems with the SEC on May 9, 2012 and in Viasystems’ other filings made from time to time with the SEC and available at the SEC’s website, www.sec.gov.

About Viasystems

Viasystems Group, Inc. is a technology leader and a worldwide provider of complex multi-layer printed circuit boards (PCBs) and electro-mechanical solutions (E-M Solutions). Its PCBs serve as the “electronic backbone” of almost all electronic equipment, and its E-M Solutions products and services include integration of PCBs and other components into finished or semi-finished electronic equipment, for which it also provides custom and standard metal enclosures, cabinets, racks and sub-racks, backplanes and busbars. Viasystems’ approximately 15,600 employees around the world serve over 1,000 customers in the automotive, telecommunications, industrial & instrumentation, computer and datacommunications, and military and aerospace end markets. For additional information about Viasystems, please visit the company’s website at www.viasystems.com.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ( dollars in thousands, except per share amounts) (Unaudited)
		Three Months Ended
		June 30, 2012				March 31, 2012				June 30, 2011
Net sales		$	296,861			$	262,089			$	270,744
Operating expenses:
Cost of goods sold, exclusive of items shown separately			235,556				211,057				219,574
Selling, general and administrative			31,228				21,492				19,268
Depreciation			18,579				17,006				16,332
Amortization			802				388				430
Restructuring and impairment			1,958				6,987				–
Operating income			8,738				5,159				15,140
Other expense (income):
Interest expense, net			12,144				7,352				7,225
Amortization of deferred financing costs			766				504				504
Loss on early extinguishment of debt			24,234				–				–
Other, net			(710	)			224				532
(Loss) income before income taxes			(27,696	)			(2,921	)			6,879
Income taxes			5,342				2,216				3,311
Net (loss) income		$	(33,038	)		$	(5,137	)		$	3,568
Less:
Net income (loss) attributable to noncontrolling interest			271				(495	)			385
Net (loss) income attributable to common stockholders		$	(33,309	)		$	(4,642	)		$	3,183
Basic (loss) earnings per share		$	(1.67	)		$	(0.23	)		$	0.16
Diluted (loss) earnings per share		$	(1.67	)		$	(0.23	)		$	0.16
Basic weighted average shares outstanding			19,990,628				19,984,414				19,980,153
Diluted weighted average shares outstanding			19,990,628				19,984,414				20,135,530
This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ( dollars in thousands)
		June 30, 2012				December 31, 2011
ASSETS		(unaudited)
Current assets:
Cash and cash equivalents		$	85,092			$	71,281
Restricted cash			6,830				–
Accounts receivable, net			222,604				196,065
Inventories			135,939				116,457
Prepaid expenses and other			40,946				34,280
Total current assets			491,411				418,083
Property, plant and equipment, net			418,802				307,290
Goodwill and other noncurrent assets			278,177				113,876
Total assets		$	1,188,390			$	839,249
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		$	12,213			$	10,054
Accounts payable			211,403				195,908
Accrued and other liabilities			103,107				75,388
Total current liabilities			326,723				281,350
Long-term debt, less current maturities			564,051				216,716
Other non-current liabilities			50,228				48,111
Total liabilities			941,002				546,177
Total stockholders’ equity			247,388				293,072
Total liabilities and stockholders’ equity		$	1,188,390			$	839,249
This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ( dollars in thousands) (unaudited)
		Six Months Ended					Six Months Ended
		June 30, 2012					June 30, 2011
Net cash provided by operating activities		$	32,152				$	17,675
Cash flows from investing activities:
Acquisition of DDi, net of cash acquired			(253,464	)				–
Capital expenditures			(52,490	)				(49,808	)
Acquisition of remaining interest in joint venture			(10,106	)				–
Proceeds from disposals of property			102					104
Net cash used in investing activities			(315,958	)				(49,704	)
Cash flows from financing activities:
Proceeds from 7.875% Senior Secured Notes			550,000					–
Repayment of 12.0% Senior Secured Notes			(236,295	)				–
Financing and other fees			(16,006	)				–
Repayments of mortgages and credit facilities, net of borrowings			(82	)				–
Repayments of capital lease obligations			–					(154	)
Distributions to noncontrolling interest			–					(229	)
Net cash provided by (used in) financing activities			297,617					(383	)
Net change in cash and cash equivalents			13,811					(32,412	)
Beginning cash			71,281					103,599
Ending cash		$	85,092				$	71,187
This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AS ADJUSTED FOR EFFECTS OF ACQUISITION AND REFINANCING ( dollars in thousands) (Unaudited)
		Three Months Ended June 30, 2012
		As Reported					Special Items			Non-GAAP Adjusted
Net sales		$	296,861			$				$	296,861
Operating expenses:
Cost of goods sold, exclusive of items shown separately			235,556				(3,947	)	(a)		231,609
Selling, general and administrative			31,228				(7,978	)	(b)		23,250
Depreciation			18,579								18,579
Amortization			802								802
Restructuring and impairment			1,958				(199	)	(c)		1,759
Operating income			8,738								20,862
Other expense (income):
Interest expense, net			12,144				(4,302	)	(d)		7,842
Amortization of deferred financing costs			766				(206	)	(e)		560
Loss on early extinguishment of debt			24,234				(24,234	)	(f)		–
Other, net			(710	)							(710	)
(Loss) income before income taxes			(27,696	)							13,170
Income taxes			5,342				(3,700	)	(g)		1,642
Net (loss) income		$	(33,038	)						$	11,528

(a)		Represents the excess of i) the fair value of inventories purchased in connection with the acquisition of DDi, over ii) the manufactured cost of inventories purchased in connection with the acquisition of DDi.
(b)		Represents fees and expenses related to the acquisition of DDi.
(c)		Represents costs of severance for employees made redundant following the acquisition of DDi.
(d)		Represents i) approximately $2,200 cash interest expense and approximately $133 non-cash interest expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $1,969 cash interest expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.
(e)		Represents i) approximately $116 amortization expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $90 amortization expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.
(f)		Represents cash and non-cash costs incurred in connection with the early termination of the 12.0% 2015 Notes on May 30, 2012.
(g)		Represents income tax expense charged in the quarter ended June 30, 2012 in connection with uncertain realizability of deferred tax assets.

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION NET SALES AND BALANCE SHEET STATISTICS (dollars in millions) (Unaudited)
		Three Months Ended
		June 30, 2012 (a)							March 31, 2012 (a)						June 30, 2011(a)
Net sales by segment
Printed Circuit Boards (a)		$	240.4		81	%			$	213.1	81	%			$	215.1		79	%
Assembly			56.5		19	%				49.0	19	%				55.6		21	%
		$	296.9		100	%			$	262.1	100	%			$	270.7		100	%

(a) Excludes $44.1, $68.9 and $66.2 net sales by DDi Corp. during the three months ended June 30, 2012, March 31, 2012, June 30, 2011, respectively.

		Percentage of Pro Forma (b) Net Sales												PF (b) Net Sales Increase
		Three Months Ended												Sequential:				Year/Year:
		Jun. 30,				Mar. 31,				Jun. 30,				2Q12 vs				2Q12 vs
		2012				2012				2011				1Q12				2Q11
Pro forma (b) net sales by end market
Automotive		30	%			32	%			30	%			(2	%)			2	%
Industrial & Instrumentation		29	%			26	%			29	%			14	%			3	%
Computer and Datacommunications		17	%			18	%			15	%			(7	%)			13	%
Telecommunications		15	%			14	%			17	%			11	%			(13	%)
Military and Aerospace		9	%			10	%			9	%			(2	%)			(1	%)
		100	%			100	%			100	%			3	%			1	%

(b) Includes the effects of $44.1, $68.9 and $66.2 net sales by DDi Corp. during the three months ended June 30, 2012, March 31, 2012, June 30, 2011, respectively.

		2Q12 (c)			1Q12			4Q11			3Q11			2Q11
Working capital metrics
Days’ sales outstanding		58.8			63.4			65.6			63.9			64.0
Inventory turns		8.0			7.5			7.1			7.9			8.6
Days’ payables outstanding		70.0			79.7			85.8			80.0			77.4
Cash cycle (days)		33.8			32.0			30.8			29.4			28.4

(c) Adjusted for the effects of working capital acquired from DDi Corp.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF OPERATING INCOME TO ADJUSTED EBITDA ( dollars in millions) (Unaudited)
		Three Months Ended
		June 30, 2012				March 31, 2012				June 30, 2011
Operating income		$	8.7			$	5.2			$	15.1
Add-back:
Depreciation and amortization			19.4				17.4				16.8
Costs relating to acquisitions and equity registrations			11.9				1.0				0.1
Non-cash stock compensation expense			2.7				2.5				2.3
Restructuring and impairment			2.0				7.0				–
Adjusted EBITDA		$	44.7			$	33.1			$	34.3

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF DILUTED EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE ( dollars in thousands, except per share amounts) (Unaudited)
		Three Months Ended
		June 30, 2012					March 31, 2012					June 30, 2011
Net (loss) income attributable to common stockholders (GAAP)		$	(33,309	)			$	(4,642	)			$	3,183
Adjustments:
Non-cash stock compensation expense			2,669					2,521					2,339
Amortization			1,568					892					934
Loss on early extinguishment of debt			24,234					–					–
Costs related to acquisitions and equity registrations			11,925		(a)			1,012					99
Transition period interest			4,169		(b)			–					–
Restructuring and impairment			1,958					6,987					–
Special income tax items			1,716					(683	)				(745	)
Non-cash interest			266					399					399
Income tax effects of adjustments			(44	)				–					2
Adjusted net income attributable to common stockholders		$	15,152				$	6,486				$	6,211
Diluted weighted average shares outstanding			20,252,446					20,172,532					20,135,530
Diluted (loss) earnings per share (GAAP)		$	(1.67	)			$	(0.23	)			$	0.16
Adjusted EPS		$	0.75				$	0.32				$	0.31

(a)		Includes i) approximately $7,978 fees and expenses related to the acquisition of DDi, plus ii) $3,947 representing the fair value write-up of inventories purchased in connection with the DDi acquisition.
(b)		Represents i) approximately $2,200 cash interest expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $1,969 cash interest expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.

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